• CherryHill Mortgage Inv. Corp (CHMI) is a mortgage REIT. Partners with Freedom Mortgage Corp (private mortgage originator) – invested $20MM in the business and own 13.5% of the company. Freedom paid the listing fees for the IPO.
• IPO priced $20, BV $19ish. Freedom was started in 1990.
• CHMI has a 10.5% yield. $21.5 BV, stock trades at $19.
• It was a way for Freedom to have a cheaper cost of capital set-up.
• Cherryhill is purely an investor. Cherryhill does not have to do the bidding, they have a steady flow from freedom – have an agreement with freedom in regards to excess MSR sales – valued by a third party.
• Chris believes incentives are aligned.
• Picked up two pools of excess MSRs since the IPO.
• What should it be worth? No-pure play comps, best comp may be HLSS. Thinks upside should be in line with HLSS and other competitors – around 1.3x TBV. Low risk with decent upside.

• Second idea – macro idea, very interesting. Investing in non-performing loans in the EU. EU banks have $1 trillion in NPLs and pressure to get rid of them.
• For example, Lloyds is exiting Ireland. Last year only $90B sold. UK, Spain and Ireland are the most interesting. Over $180B in NPLs in each country, most likely higher.
• Specific recommendation for the investment through Kennedy Wilson Europe – KWE. Raised $1.7B in February, should benefit from this trend.
• Acquired a portfolio already. Kennedy Wilson invested over $200MM in the platform (is the manager). NAV is 9.77 pounds, sells for 10.40 pounds, a small premium above NAV for a compelling idea and strong management team.
• Kennedy Wilson background – 1% mgmt. fee and a performance fee. One criteria they look for is growing foreign investment. Ireland is benefiting from Companies such as Google/LinkedIn moving to the Country. Have a lot of people on the ground.
• Although KW rose in price (the asset manager) since he first recommended it in 2012, he still likes it.

• CherryHill Mortgage Inv. Corp (CHMI) is a mortgage REIT. Partners with Freedom Mortgage Corp (private mortgage originator) – invested $20MM in the business and own 13.5% of the company. Freedom paid the listing fees for the IPO.
• IPO priced $20, BV $19ish. Freedom was started in 1990.
• CHMI has a 10.5% yield. $21.5 BV, stock trades at $19.
• It was a way for Freedom to have a cheaper cost of capital set-up.
• Cherryhill is purely an investor. Cherryhill does not have to do the bidding, they have a steady flow from freedom – have an agreement with freedom in regards to excess MSR sales – valued by a third party.
• Chris believes incentives are aligned.
• Picked up two pools of excess MSRs since the IPO.
• What should it be worth? No-pure play comps, best comp may be HLSS. Thinks upside should be in line with HLSS and other competitors – around 1.3x TBV. Low risk with decent upside.

• Second idea – macro idea, very interesting. Investing in non-performing loans in the EU. EU banks have $1 trillion in NPLs and pressure to get rid of them.
• For example, Lloyds is exiting Ireland. Last year only $90B sold. UK, Spain and Ireland are the most interesting. Over $180B in NPLs in each country, most likely higher.
• Specific recommendation for the investment through Kennedy Wilson Europe – KWE. Raised $1.7B in February, should benefit from this trend.
• Acquired a portfolio already. Kennedy Wilson invested over $200MM in the platform (is the manager). NAV is 9.77 pounds, sells for 10.40 pounds, a small premium above NAV for a compelling idea and strong management team.
• Kennedy Wilson background – 1% mgmt. fee and a performance fee. One criteria they look for is growing foreign investment. Ireland is benefiting from Companies such as Google/LinkedIn moving to the Country. Have a lot of people on the ground.
• Although KW rose in price (the asset manager) since he first recommended it in 2012, he still likes it.

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